IMPROVEMENT SKILLS CONSULTING LTD.

Simply, improvement

Are you ready for a Balanced Scorecard?

Are you ready for a Balanced Scorecard?

Most improvement initiatives fail for one of two reasons: they either have passion without system, or system without passion. You need both. [Tom Peters]

Successful Change
One of the really useful models of successful change is shown below:

Pressure for change

Vision for change

Capacity for change

Actionable first steps

It describes the four components required for change to be successful and if any one of these is missing, it is likely that change will be difficult, or will fail. Some versions of the model add a fifth component: Recognition and Reinforcement, which is required to ensure change is sustainable. Weve used the model as a means of helping senior managers assess their readiness to adopt performance management approaches such as the Balanced Scorecard. It provides a way to engage with senior teams and to have practical discussions about their role in successful implementation and in recognising some of the implications of adopting a Balanced Scorecard approach. It can be used to raise awareness and to prevent potential implementation problems.

1 2009 Improvement Skills Consulting Ltd. Registered Office: 204 Blind Lane, Flackwell Heath HP10 9LE Company Registration Number: 06427548 VAT Number: 922 3390 42 E: info@improvment-skills.co.uk W: www.improvement-skills.co.uk

The Readiness Assessment model (below) only covers the first three components (Pressure, Vision, Capacity) because Actionable First Steps can then become the elements of your implementation plan. You will also need to build in recognition and reinforcement, to ensure the Balanced Scorecard is used effectively and drives the right behaviour.

Readiness Assessment
Pressure for Change

The executive management team does not recognise the need for a Balanced Performance Management System There is no executive level champion for the development of the Performance Management system Most people throughout the organisation would not recognise (or would deny) the need to manage and improve performance more effectively
Vision for Change

Some of the executive management team recognise and support the need for a Balanced Performance Management System An executive level champion has been appointed for the development of the Performance Management system Some people throughout the organisation recognise the need to manage and improve performance more effectively

The executive management team fully supports the need for a Balanced Performance Management System There is an active executive level champion for the development of the Performance Management system Most people throughout the organisation recognise the need to manage and improve performance more effectively

The current Strategy is unclear or incomplete and cannot be easily aligned to peoples daily work It is not known what impact a Balanced Performance Management system will have on the organisation
Capacity for Change

Some aspects of the current Strategy could be used to align peoples activities throughout the organisation It is believed that a Balanced Performance Management system will only have marginal impact on the organisation A Project Leader has been appointed to create the Performance Management system Performance Management is currently metrics-based (e.g. using MS Excel reports; some trend graphs are used)

There is an agreed, coherent Strategy that can be readily cascaded through the organisation It is recognised that a Balanced Performance Management system will impact on all levels of the organisation A project team is signed up to create the Performance Management system Performance Management is currently knowledge-based (e.g. using Scorecard and Business Intelligence software; traffic lights, trends, targets and benchmarks are used)

No people resources have been allocated to create the Performance Management system Performance Management is currently text-based (e.g. using MS Word performance reports; commentaries and tables of data are used)

2009 ISC Ltd.

Performance Management tools are largely manual and resource-intensive There is no history of datadriven decision-making processes for Performance Management Ownership and accountabilities for maintaining the Performance Management system (after the design project) has not been considered

Performance Management tools are partly automated but still resource-intensive There is some history of datadriven decision-making processes for Performance Management Ownership and accountabilities for maintaining the Performance Management system (after the design project) have been proposed

Performance Management tools are fully automated and easy to use All levels of the organisation are familiar with data-driven decision-making processes for Performance Management Ownership and accountabilities for maintaining the Performance Management system have been defined and implemented

Some obvious actions

There are some obvious actions to enable a successful implementation: Ensure there is an executive level Champion/Sponsor for the implementation project who has a good understanding of the BS approach Provide education for senior managers so they understand the why, what and how of the BS (and how it differs from Dashboards) Decide whether you will use the BS design process to help reformulate Objectives and Strategies, or if you will build the BS from existing ones Build a BS design team and ensure they have the right skills Consider what IT support will be needed to enable implementation and support the continuing use of the BS Provide end-user education on management by fact, effective use of data and continuous improvement As with many change initiatives, implementing a Balanced Scorecard is not technically difficult, particularly if you have user-friendly software tools to support it. The challenges are almost always cultural and its not necessarily resistance to change. Often, the issues will be due to lack of executive ownership, poor understanding of BS principles and inadequate skills (at all levels). No surprises there then! If you want to find out about the Balanced Scorecard approach, please visit our website for more articles.

2009 ISC Ltd.

Our track record

Our consultants have been helping organisations in the private and public sectors to implement performance management systems, including those based on Balanced Scorecard principles, for nearly two decades. We have helped with BS design, senior management education and facilitation of BS implementation project teams. We are not wedded to a particular methodology. We help clients identify their improvement goals and then develop an approach to achieve these; invariably ensuring their people develop the skills to make further improvements themselves. We also work with technology partners to recommend and provide appropriate IT solutions to support BS implementation. Please contact us for more information about how we can help you to implement a performance planning and management approach, based on the Balanced Scorecard.

SIM PLY, IM PROVEMENT

Are you ready for a Balanced Scorecard?

2009 Improvement Skills Consulting Ltd., 204 Blind Lane, Flackwell Heath, High Wycombe HP10 9LE Phone 07850 728506 Fax 0871 221 5638 E info@improvement-skills.co.uk W www.improvement-skills.co.uk

2009 ISC Ltd.